The topic of teaching children financial literacy usually raises one fundamental question, which is whether it is appropriate to even teach children financial literacy.
The answer to such a question of the appropriateness of teaching children financial literacy is definitely a positive one, since the outcomes are positive in adulthood, especially when comparing the financial management skills of people from homes with the history of entrepreneurs, retailers and businesses to people from homes without any history of those engagements.
Financial literacy encompasses three main broad areas, which are how to make money, how to save or be prudent with money and how to multiply money (investment).
The lessons on these three main areas of financial literacy for children must not be theoretical, but rather they must be practical with the daily lifestyle needs of the child, which the child would associate with and help him or her appreciate the lesson better.
Lesson one (1): How To Make Money
To advise a child how to look for money genuinely, he or she must be consciously introduced to the genuine means of making money early.
The initial question to ask is how money is made. Money is made purely through the provision of products and services for profit. However, though adults receive their revenue or profit after the provision of any product or services, the gains made by children must be kept in trust for them for a period of time (monthly or quarterly or half-yearly or annually) or up to meeting a target set for themselves (particular amount).
There are several products and services that children provide in the house that can be monetized for children, of which such funds can be accumulated to provide certain needs for the same child. The cost of services provided by the child does probably not need to be at the market price. The interesting part of this lesson is that the needs for which the accumulated funds would be used to cater for must be addressed by the parent or guardian anyway. Therefore, monetising the products and services provided by the child to the household is purely a concept being introduced to the subconscious mind of the child to apply later in life.
Though lessons on savings for children can start before age five (5), the lesson on how to make money and investment for children must start after age five (5), when the child will be more conscious of appreciating the concept.
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